London, England (CNN) -- A British oil rig has started drilling off the Falkland Islands in a move likely to stoke further tensions between Argentina and the UK over the disputed South Atlantic territory.

In a statement to the London Stock Exchange, British oil and gas exploration company Desire Petroleum said the Ocean Guardian rig had begun drilling an exploration well in the North Falkland Basin, some 100 kilometers (60 miles) north of the islands.

Desire estimates that the North Falkland Basin could contain 3.5 billion barrels of oil as well as having "significant gas potential." The exploratory drilling is expected to last around 30 days, a spokesman for the company told CNN.

But potential revenues from oil and gas have reignited a long-running dispute between London and Buenos Aires over ownership of the Falklands.

Last Tuesday Argentine President Cristina Fernandez de Kirchner signed a decree requiring all ships navigating from Argentina to the islands to carry a government permit.

The Falklands, known as Las Malvinas in Argentina, lie in the South Atlantic Ocean off the Argentinean coast and have been under British rule since 1833.

Argentina has always claimed sovereignty over the islands and invaded them in 1982, prompting a war in which more than 600 Argentinean and 255 British military personnel died.

The island's government, representing a population of around 2,500, remains committed to British sovereignty and the UK maintains a military presence on the islands.

The spokesman for Desire said that the company was not commenting on political issues and was "focusing on the drilling campaign."

The Argentine position is that natural resources around the islands should be protected, and Britain must accept international resolutions labeling the Falklands a disputed area.

"This has to do with the defense of the interests of Argentineans, not just about sovereignty," Argentine Cabinet Chief Anibal Fernandez said last week, adding that Argentina lays claim not just to the islands, but to any resources that could be found there.

In a statement last week, the Falkland Islands government said it had "every right to develop a hydrocarbons industry within our waters."

"The British Government has clearly stated that they support our right to develop legitimate business," it said. "The British Government have also reiterated their stance on our British sovereignty."